Dec. 24 (Bloomberg) -- U.S. stocks fell amid growing
concern American lawmakers will fail to reach a budget agreement
by the end of the year. The yen weakened as Japan’s incoming
prime minister said he will consider changing the law governing
the central bank, while commodities declined.

Time is running out for U.S. lawmakers and President Barack
Obama to agree on a budget deal by year-end to avoid triggering
more than $600 billion in tax increases and spending cuts,
Senator Joseph Lieberman said. Japan’s Shinzo Abe said he will
consider changing laws governing the central bank if it fails to
revise its inflation target up to 2 percent next month.

“Fiscal cliff, fiscal cliff, fiscal cliff,” said Jacques
Porta, who helps manage $627 million at Ofi Patrimoine in Paris.
“There’s a lot of uncertainty. We’re at a political dead end.
Everything has cooled off. The market has become cautious.”

Trading on the New York Stock Exchange closed at 1 p.m.
today ahead of the Christmas holiday. Trading in Treasuries
ended at 2 p.m. New York time and will remain closed Dec. 25,
according to the website of the Securities Industry and
Financial Markets Association. Exchanges in 10 of the 18 western
European nations were shut today, including Germany, Switzerland
and Italy. The other markets closed early.

Thin Volume

Hewlett-Packard Co., Microsoft Corp. and McDonald’s Corp.
slumped at least 1 percent to lead declines among the biggest
U.S. companies. Research In Motion Ltd. slid 2.8 percent, after
the largest drop since 2008 on Dec. 21. Trading in S&P 500
companies was 33 percent below the 30-day average at this time
of day.

The S&P 500 had its biggest decline in more than a month on
Dec. 21 after U.S. House Speaker John Boehner failed to garner
support from his caucus for “Plan B,” which would have
extended tax cuts on incomes below $1 million. The gauge has
rallied 14 percent this year, its largest annual gain since
2009.

“For the first time I feel it’s more likely that we will
go off the cliff,” Lieberman, a retiring Connecticut
independent, said on CNN’s “State of the Union” program.
Lawmakers plan to return to Washington Dec. 27 to continue their
negotiations.

Yen Weakens

The yen fell 0.7 percent to 84.84 per dollar, weakening
against all of its 16 major counterparts. Abe said on Fuji
Television yesterday that he will consider revising the central
bank law if the Bank of Japan fails to increase its inflation
target to 2 percent from 1 percent at its January meeting.

The yen has tumbled 13 percent this year, the worst
performer among the 10 developed-nation currencies tracked by
Bloomberg Correlation-Weighted Indexes. The dollar has weakened
2.7 percent and the euro has dropped 0.9 percent.

Natural gas futures declined in New York as forecasts for a
warmer start to January signaled reduced demand for heating
fuels. MDA Weather Services in Gaithersburg, Maryland, predicted
above-normal temperatures for the middle third of the U.S. from
Jan. 3 through Jan. 7.